Local professor told to stop fund raising for proposed university

Published: Tuesday, March 26, 2013 at 4:04 p.m.

Last Modified: Tuesday, March 26, 2013 at 4:04 p.m.

A University of South Carolina Upstate professor is continuing to teach while being investigated by the S.C. Attorney General's Office for securities violations and by the university for a possible conflict of interests.

On Friday, the Securities Division of the Attorney General's Office issued Richard “Ric” Routh, a professor of informatics at Upstate, an order to cease and desist fundraising efforts for his start-up establishment, Invictus University.

According to the order, Routh solicited funds for Invictus, which is not registered as a corporation in South Carolina, or Routh's native North Carolina. A website for Invictus, www.invictus-university.com, advertised a 2018 public offering of the company at a value of $10 billion and encouraged investors to get in on the “ground floor” by investing $200,000 for 0.1 percent of the company. The site boasted the investment would be returned more than 50-fold, according to the order.

The website and a YouTube video of Routh touting the project were no longer available as of Tuesday afternoon.

Despite a disclaimer on the site that it is not intended to solicit securities, the Attorney General's Office found the investment offers and shares being offered to constitute securities and therefore in violation of the Uniform Securities Act of 2005.

At this time, the Attorney General's Office is not aware of anyone who has bought into Invictus, spokesman Mark Powell said.

“We always try to quickly warn South Carolinians when an investment is not complying with state law. That is why we ordered this company to stop offering securities in South Carolina,” Attorney General Alan Wilson said in a written statement.

Routh said Invictus is a concept he is investigating with a team of educators. The idea is in its infancy, he said, and he denied violating securities laws.

“The company doesn't exist. Stock in the company doesn't exist. No securities have been sold,” he said.

The website was an attempt to find a founding partner who, if the team decided to move forward, would provide the funds to launch a corporation, Routh said.

USC Upstate administrators have known about Routh's efforts in support of Invictus University for about 30 to 60 days, university spokeswoman Tammy Whaley said, but no action was taken because professors are not barred from outside employment in their expert capacities. When the school was notified of the cease and desist order Monday afternoon, an internal investigation was launched to determine if Routh violated any university policies pertaining to conflicts of interest, she said. The university also is participating in the Attorney General's ongoing investigation.

Routh could face civil penalties of up to $10,000, according to the order. Whether he will be allowed to properly register Invictus University as a corporation and legally solicit securities will be decided based on whether the investigation turns up malice or a willful intent to defraud investors, Powell said.

Routh said Invictus University is based on a vision to improve the quality of education while reducing price. The Internet-based classes would use technology to tailor classes to individual students based on their needs that day. It would demand mastery of key learning points before the completion of the lesson and would enhance knowledge retention through reinforcement.

“That's one of the things I've struggled with here at the university,” Routh said. “It continues to discourage me that students have forgotten principles they were supposed to have learned as a foundation to build knowledge on.”

The university's curriculum would be research-based and administered by the highest quality professors, he said, but such an achievement requires a substantial investment. Routh estimated it would cost $500,000 to $1 million to develop each course.

Routh said no decision has been made whether to pursue Invictus University in light of the cease and desist order.

<p>A University of South Carolina Upstate professor is continuing to teach while being investigated by the S.C. Attorney General's Office for securities violations and by the university for a possible conflict of interests.</p><p>On Friday, the Securities Division of the Attorney General's Office issued Richard “Ric” Routh, a professor of informatics at Upstate, an order to cease and desist fundraising efforts for his start-up establishment, Invictus University.</p><p>According to the order, Routh solicited funds for Invictus, which is not registered as a corporation in South Carolina, or Routh's native North Carolina. A website for Invictus, www.invictus-university.com, advertised a 2018 public offering of the company at a value of $10 billion and encouraged investors to get in on the “ground floor” by investing $200,000 for 0.1 percent of the company. The site boasted the investment would be returned more than 50-fold, according to the order.</p><p>The website and a YouTube video of Routh touting the project were no longer available as of Tuesday afternoon.</p><p>Despite a disclaimer on the site that it is not intended to solicit securities, the Attorney General's Office found the investment offers and shares being offered to constitute securities and therefore in violation of the Uniform Securities Act of 2005.</p><p>At this time, the Attorney General's Office is not aware of anyone who has bought into Invictus, spokesman Mark Powell said.</p><p>“We always try to quickly warn South Carolinians when an investment is not complying with state law. That is why we ordered this company to stop offering securities in South Carolina,” Attorney General Alan Wilson said in a written statement.</p><p>Routh said Invictus is a concept he is investigating with a team of educators. The idea is in its infancy, he said, and he denied violating securities laws.</p><p>“The company doesn't exist. Stock in the company doesn't exist. No securities have been sold,” he said.</p><p>The website was an attempt to find a founding partner who, if the team decided to move forward, would provide the funds to launch a corporation, Routh said.</p><p>USC Upstate administrators have known about Routh's efforts in support of Invictus University for about 30 to 60 days, university spokeswoman Tammy Whaley said, but no action was taken because professors are not barred from outside employment in their expert capacities. When the school was notified of the cease and desist order Monday afternoon, an internal investigation was launched to determine if Routh violated any university policies pertaining to conflicts of interest, she said. The university also is participating in the Attorney General's ongoing investigation.</p><p>Routh could face civil penalties of up to $10,000, according to the order. Whether he will be allowed to properly register Invictus University as a corporation and legally solicit securities will be decided based on whether the investigation turns up malice or a willful intent to defraud investors, Powell said.</p><p>Routh said Invictus University is based on a vision to improve the quality of education while reducing price. The Internet-based classes would use technology to tailor classes to individual students based on their needs that day. It would demand mastery of key learning points before the completion of the lesson and would enhance knowledge retention through reinforcement.</p><p>“That's one of the things I've struggled with here at the university,” Routh said. “It continues to discourage me that students have forgotten principles they were supposed to have learned as a foundation to build knowledge on.”</p><p>The university's curriculum would be research-based and administered by the highest quality professors, he said, but such an achievement requires a substantial investment. Routh estimated it would cost $500,000 to $1 million to develop each course.</p><p>Routh said no decision has been made whether to pursue Invictus University in light of the cease and desist order.</p>